There was a time when U.S. companies such as Motorola, General Electric, and even General Motors were in trouble. They had to become faster, better, and cheaper, or accept their eventual demise. But they not only changed; they and other U.S. companies emerged as leaders in the global market.
Today, the naval services face the same choice: they must change or face declining capabilities. Fortunately, they soon will get a tool that has helped transform corporate America: an enterprise-wide network or—as we call it—a Navy-Marine Corps Intranet. It will connect digitally all bases ashore and all ships at sea. Learning how business has used such a tool and adapting it to our needs will be essential to our change.
U.S. businesses were not always today's highly competitive organizations. Some 20 years ago, they were getting slaughtered in the marketplace. Such corporate giants as Xerox and Caterpillar were losing market shares to foreign competitors such as Cannon and Komatsu. In 1975, U.S. tool manufacturers were world leaders; by 1985, their exports were virtually nonexistent. In the 1970s and 1980s, U.S. business got a wake-up call—change or die.
Change did not come easily. After years of dominating their home markets, many companies had become fat and complacent. They had to revamp industrial-age factories, as well as corporate bureaucracies that often were likened to the Sears building: layered and tall. Those that reacted became faster, better, and cheaper. They also realized that this must be a continual process. As Jack Welch, General Electric's chief executive officer, said: "An organization's ability to learn and translate that learning into rapid action is the ultimate competitive advantage." On the battlefield, rapid action translates to the competitive advantage of battlespace.
While corporate leaders were the agents of change, information technology increasingly became the facilitator. Corporations built networks that permitted a free flow of digital information. This enabled not only learning but also its translation into rapid action. Today, companies increasingly are using corporate-wide intranets, which allow them to act almost as quickly as individuals, but with the entire company's insights. Bill Gates described the impact: "When the increase in velocity is great enough, the very nature of business changes."
Today, the naval services are at a crossroads. After demonstrating maritime preeminence in the Cold War, they find themselves with industrial-age business practices and a costly infrastructure.
In addition, the services face the prospect of a declining market position. There may not be enough ships to implement a theater missile defense program. How to afford both the F/A-18 E/F aircraft and the Joint Strike Fighter? Buying more than one Virginia (SSN-774)-class submarine annually and purchasing new aircraft carriers will be challenging. In addition, the people just are not coming in the way they used to.
There is a difference between the naval services and commercial industry, though. The Navy and Marine Corps have not had a crisis similar to the one U.S. businesses experienced more than two decades ago. Ironically, therein lies the difficulty. As Royal Dutch planner Arie de Geus puts it, the challenge is "to recognize and react to environmental change before the pain of crisis." There is a positive side, too. The naval services can learn from business.
Just as the free flow of digital information continues to change business, it can do the same for the naval service. The Navy's Information Technologies for the 21st Century (IT 21 ), the networking of forward-deployed ships, is an example. It significantly increased speed of command in Navy strike operations in Kosovo and maritime interdiction operations in the Persian Gulf. As the skipper of the USS Klakring (FFG-42) stated in the December 1999 Proceedings: "IT-21 revolutionized daily operations within the battle group" (see "The IT-21 Advantage," pages 28-32).
Widening this revolution depends on widening digital information flow. It means digitally linking our forward-deployed forces and our supporting shore establishment. It is the realization of Metcalfe's law regarding information technology: As the number of nodes in a network increases linearly, the network's effectiveness increases exponentially.
There is a problem: the Department of the Navy is an assortment of incompatible networks. Every shore command has its own. In some cases, one cannot e-mail attachments among commands. In addition, these networks have more than 200 gateways and are vulnerable to security threats, ranging from intrusion to information denial. Business had the same problem years ago. Most companies, however, have since consolidated their networks into one enterprise-wide intranet.
The Department of the Navy is following this corporate example by pursuing a department-wide network, called the Navy-Marine Corps Intranet—a secure network that links all shore commands and provides voice, video, and data services to all Navy and Marine Corps personnel. It also will enable ship-to-shore interoperability by tying into IT 21 efforts at sea.
The way the Department of the Navy went about this is important, because not all information-technology initiatives work. According to an industry study, one-third of all system-development projects are canceled before completion. Of those that are completed, only 42% successfully met their objectives.
The Department of the Navy did its homework. We found out what worked and what did not. We studied IBM, which had consolidated 31 information networks into one enterprise-wide intranet, and watched J. P. Morgan successfully out-- source its intranet services. In addition, we held an "industry day" to get the best ideas on a department-wide intranet. Users from across the department then were asked to state their needs. Technical experts collaborated on interoperability and security.
Finally, senior leaders considered how to buy this intranet and decided to purchase it like a utility. A commercial team will build, maintain, and provide every-- thing associated with the network, which is similar to much corporate practice. Other government agencies are doing the same, including the Department of Commerce, the National Aeronautics and Space Administration, the Bureau of Alcohol Tobacco and Firearms, the State of Connecticut, and San Diego County.
There are multiple benefits to this approach. Foremost, this intranet will be the responsibility of the real information technology experts—commercial industry. It also will provide standardized support throughout the Department of the Navy. If something goes wrong, there will be only "one neck to grab," as a government official put it. Also, the contractor will update the technology, which means that the department can keep up with information technologies, which change about every 18 months, without being hampered by government procurement practices.
The big question, as always, is how are we going to pay for it? The Department of the Navy has spent millions on separate information technology contracts for more than 100 different data and communications networks. It will reallocate these funds to pay for the Navy-Marine Corps Intranet. Essentially, it is the same money for a better service. It also may mean economies of scale. IBM's enterprise-wide intranet saves $2 billion annually. McDonald's estimates that its intranet provides annual savings of 18%.
The Navy-Marine Corps Intranet is only a partial solution. Change greatly depends on how well people use it. As companies found, using an enterprise-wide intranet requires an attitude change and new thinking. People not only have to use it, they also have to realize its potential. As Admiral Archie Clemins wrote in the February 2000 Proceedings, "It's more than just e-mail" (see pages 56-58). The naval services can again look to business. Corporate use of this digital tool is not universally applicable, but it does offer ideas.
Companies are using enterprise-wide intranets as "digital nervous systems." They move the right information to the right part of the organization. Any one of General Motors' 9,000 dealers can place customer orders, giving them what they want with respect to vehicle features, specifications, and pricing. The same intranet provides dealers with online tools for financial management, planning, sales analysis, and forecasting.
Consider the same possibility for forward-deployed naval forces. ITT 21 already allows users afloat to browse web sites on intelligence and weather. The Navy-- Marine Corps Intranet will make available even more information that currently resides within the supporting shore establishment. This might flesh out web sites on maintenance, logistics, and training, for example.
Corporate intranets also are enabling and accelerating distributed planning. At Ford, engineers around the world readily collaborate on vehicle design. Using a desktop computer, they can take a design proposal or a photo of the competition's car, mark it up, and send it to another engineer on the other side of the globe for comment-shaving weeks from the design process.
The Navy-Marine Corps Intranet could be used similarly. One day soon, anyone within the Department of the Navy will be able to collaborate not only by video teleconferencing but also by whiteboard sessions. They might digitally mark up photos, schemes of maneuver, or charts and transmit them to any ship or shore installation.
Intranets are being used increasingly for knowledge management. For too long, company best practices and lessons learned were passed on by word of mouth. If documented, they were kept in someone's file cabinet. Today, firms such as Andersen Consulting and McKinsey & Co., Inc. have online systems that capture and share such information with their personnel. Compare this to the limited availability of lessons learned in the Navy and Marine Corps today. The intranet can solve this problem.
Intranets also are seen as key to high-technology maintenance, particularly in large organizations. Mazda North America's intranet delivers technical information on its cars to service shops in its dealerships across the country. Companies such as Boeing have digitized technical manuals and systems designs, which can be accessed on local-area networks by workers with wearable electronics.
The Navy and Marine Corps are making significant progress in this area. The Navy uses GOSNET, which allows repair documents and engineer drawings to be shared online. A pilot project called Telelogistics on board the USS Scout (MCM-8) at Ingleside, Texas, provides personnel with access to maintenance and logistics data from Navy shore activities. The Navy-Marine Corps Intranet will enable even wider distribution of maintenance documents, particularly to forward-deployed forces.
Companies also are using intranets to make more efficient use of medical services. Acadian Ambulance is linking onshore doctors to more than a hundred emergency medical technicians on oil platforms throughout the Gulf of Mexico. This will be used for diagnosis and onsite treatment.
The same is possible for far-flung naval forces. The Navy has conducted telemedicine on board ships such as the USS George Washington (CVN-73), and projects such as the Virtual Naval Hospital have created digital health-services libraries. The Navy-Marine Corps Intranet could readily provide forward-deployed forces with access to the entire shore-based medical establishment. This would facilitate teleconsultation, digital X-rays, computer tomography and ultrasound transmissions, clinical e-mail, high-resolution still imagery, and teledentistry.
An increasing number of companies are using online training and education services, and so is the Navy. Nine naval reactor engineers recently graduated from a new distance learning program at the Naval Postgraduate School. At Newport, for example, sexual harassment training is run over the intranet. The Navy-Marine Corps Intranet increases the opportunities for distance learning within the naval services. These could include occupational specialty training, professional military education, and college degree programs.
Companies are using their intranets for what is called enterprise resource planning. Essentially, this is the integration of such functions as finance and purchasing. Boise Cascade previously processed accounts payable transactions at 120 business locations. This has since been consolidated in Boise's main office, which is supported by 25 personnel. Such integration also ensures that everyone uses the same financial figures. Similar enterprise resource planning could be a lifesaver for a Department of the Navy that is awash in an ocean of paperwork.
The successful organizations of the future will be the ones that use digital tools to reinvent the way they work. The Navy-Marine Corps Intranet offers the potential for big change in an organization that very much needs it. It could mean the difference between remaining a preeminent maritime power and becoming a declining one. Whether we reinvent ourselves, though, largely depends now on how we use this tool.
Mr. Cipriano is the charter Program Executive Officer for Information Technology in the Department of the Navy.